BILL NUMBER: AB 1661	CHAPTERED  07/12/99

	CHAPTER   84
	FILED WITH SECRETARY OF STATE   JULY 12, 1999
	APPROVED BY GOVERNOR   JULY 12, 1999
	PASSED THE ASSEMBLY   JUNE 16, 1999
	PASSED THE SENATE   JUNE 15, 1999
	AMENDED IN SENATE   JUNE 15, 1999

INTRODUCED BY   Assembly Members Torlakson, Nakano, Jackson, Florez,
Longville, and Reyes and Senators Peace, Dunn, Karnette, Rainey,
Chesbro, Schiff, Costa, McPherson, and Ortiz

                        MARCH 11, 1999

   An act to amend Section 41204.1 of the Education Code, to amend
Section 63041 of, and to add Sections 63025.2, 63035.5, and 63041.5
to, the Government Code, and to add Section 97.43 to the Revenue and
Taxation Code, relating to local government relief, making an
appropriation therefor, and declaring the urgency thereof, to take
effect immediately.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1661, Torlakson.  Local government relief.
   Existing law establishes the California Infrastructure and
Economic Development Bank in the Trade and Commerce Agency with
specified authority, including the authority to make loans to
sponsors in connection with the financing of a project and the
authority to engage the services of private consultants to render
professional and technical assistance.
   This bill would provide that nothing in these authorizations
regarding the bank shall be construed to extend or limit the
authority of the bank with respect to personal services contracts
beyond provisions that are otherwise specified for state agencies
using personal services contracts.
   Existing law requires the bank to establish criteria, priorities,
and guidelines for the selection of projects to receive assistance
from the bank.  Existing law also requires the legislative body of a
sponsor to make certain findings, by resolution, prior to submitting
a project to the bank for consideration.
   This bill would add a requirement that a finding be made that the
project is consistent with the criteria, priorities, and guidelines
established by the bank.
   The bill would also provide that from the funds appropriated in
Item 2920-111-0001 of the Budget Act of 1999, $425,000,000 shall be
available for financial assistance, including, but not limited to,
leveraged revolving fund loans, to local government sponsors for
public development facilities.  The bill would further prohibit the
bank from making any single loan in excess of 10% of the combined
amount of this appropriation and an appropriation made to the bank in
the Budget Act of 1998 unless approved by the board of directors of
the bank and the Director of Finance provides notice to the Joint
Legislative Budget Committee.
   Existing law requires the bank, not later than November 1 of each
year, to submit a report of specified activities to the Governor and
the Joint Legislative Budget Committee.
   This bill would require this report to be submitted on a quarterly
basis during the 1999-2000 fiscal year and the 2000-01 fiscal year.

   Existing property tax law requires the county auditor, in each
fiscal year, to allocate property tax revenue to local jurisdictions
in accordance with specified formulas and procedures, and generally
requires that each jurisdiction be allocated an amount equal to the
total of the amount of revenue allocated to that jurisdiction in the
prior fiscal year, subject to certain modifications, and that
jurisdiction's portion of the annual tax increment, as defined.
Existing property tax law also reduces the amounts of ad valorem
property tax revenue that would otherwise be annually allocated to
the county, cities, and special districts pursuant to these general
allocation requirements by requiring, for purposes of determining
property tax revenue allocations in each county for the 1992-93 and
1993-94 fiscal years, that the amounts of property tax revenue deemed
allocated in the prior fiscal year to the county, cities, and
special districts be reduced in accordance with certain formulas.  It
requires that the revenues not allocated to the county, cities, and
special districts as a result of these reductions be transferred to
the Educational Revenue Augmentation Fund in that county for
allocation to school districts, community college districts, and the
county office of education.
   This bill would, for the 2000-01 fiscal year and each fiscal year
thereafter, modify these reduction and transfer provisions by
limiting the total reduction and transfer amount for all the local
agencies in each county to the corresponding total amount for the
1999-2000 fiscal year.  This bill would require that the revenues not
allocated to the county's Educational Revenue Augmentation Fund as a
result of this limitation be instead allocated among the local
agencies in the county, as provided.  By imposing new duties in the
annual allocation of ad valorem property tax revenues, this bill
would impose a state-mandated local program.
   This bill would also provide that the moneys appropriated pursuant
to a specified line item in the Budget Act of 1999 be allocated (1)
1/2 to counties, and then among the local agencies in each county, in
accordance with specified requirements and formulas applied to
reduction and transfer amounts implemented for the 1998-99 fiscal
year, and (2) 1/2 among the cities and the counties in accordance
with the relative populations of the cities and unincorporated areas
of counties.  By providing for state revenues to be allocated in
specified amounts to specified recipients, this bill would make an
appropriation.
   Existing property tax law requires a county auditor to annually
calculate the property tax administrative cost shares attributable,
as provided, to the local jurisdictions in the county and the county'
s Educational Revenue Augmentation Fund.  Existing law also provides
for a county's recovery of those cost shares, except for those cost
shares calculated with respect to school entities or a county's
Educational Revenue Augmentation Fund.
   This bill would, for the 2000-01 fiscal year and each fiscal year
thereafter, require the Legislature to subvene an amount sufficient
to reimburse counties for the property tax administrative cost shares
calculated for school entities as defined by a specified provision,
and would establish procedures to be followed in allocating this
amount from the General Fund among the counties in each subject
fiscal year.
   This bill would state the intent of the Legislature with respect
to the impact upon certain legal claims and future measures of
certain of the provisions of this bill.  This bill would also provide
that certain of its provisions shall not become operative unless an
amendment to the California Constitution, meeting certain
requirements, is approved by the statewide electorate during the 2000
calendar year.
   This bill would also state the intent of the Legislature, and
would require the Director of Finance to make certain adjustments,
with respect to ensuring that the modifications required by this bill
and earlier acts to property tax revenue allocations do not have a
net fiscal impact on school districts or community college districts,
or upon the state's obligation under the California Constitution to
provide funding to those districts.
  The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state.  Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   This bill would declare that it is to take effect immediately as
an urgency statute.
   Appropriation:   yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 41204.1 of the Education Code is amended to
read:
   41204.1.  (a) (1) Pursuant to paragraph (2) of subdivision (b) of
Section 41204, the Director of Finance shall annually adjust "the
percentage of General Fund revenues appropriated for school districts
and community college districts, respectively, in the 1986-87 fiscal
year" for purposes of applying paragraph (1) of subdivision (b) of
Section 8 of Article XVI of the California Constitution, to reflect
those property tax revenue allocation modifications, required by the
amendments made to Chapter 6 (commencing with Section 95) of Part 0.5
of Division 1 of the Revenue and Taxation Code by the qualifying
provisions, in a manner that ensures that those modifications will
have no net fiscal impact upon the amounts that are otherwise
required to be applied by the state for the support of school
districts and community college districts pursuant to Section 8 of
Article XVI of the California Constitution.
   (2) For purposes of this section, "qualifying provisions" means
all of the following:
   (A) The amendments made to Chapter 6 (commencing with Section 95)
of Part 0.5 of Division 1 of the Revenue and Taxation Code during the
1991-92 Regular Session and the 1993-94 Regular Session.
   (B) The amendments made to Sections 97.2 and 97.3 of the Revenue
and Taxation Code by Chapter 1111 of the Statutes of 1996.
   (C) Section 97.43 of the Revenue and Taxation Code.
   (b) Notwithstanding any other provision of law, for the 2000-01
fiscal year and each fiscal year thereafter, the percentage of
"General Fund revenues appropriated for school districts and
community college districts, respectively, in fiscal year 1986-87,"
for purposes of paragraph (1) of subdivision (b) of Section 8 of
Article XVI of the California Constitution, shall be deemed to be the
percentage of General Fund revenues that would have been
appropriated for those entities if the amendments made to Chapter 6
(commencing with Section 95) of Part 0.5 of Division 1 of the Revenue
and Taxation Code during the 1991-92 Regular Session, the amendments
made to that same chapter during the 1993-94 Regular Session, and
Section 97.43 of the Revenue and Taxation Code, had been operative
for the 1986-87 fiscal year.
   (c) In no event shall the recalculations pursuant to subdivisions
(a) and (b) result in a percentage that exceeds the "percentage of
General Fund revenues appropriated for school districts and community
college districts, respectively, in fiscal year 1986-87," for
purposes of paragraph (1) of subdivision (b) of Section 8 of Article
XVI of the California Constitution prior to the amendments made to
Chapter 6 (commencing with Section 95) of Part 0.5 of Division 1 of
the Revenue and Taxation Code during the 1991-92 Regular Session.
   (d) It is the intent of the Legislature to ensure both of the
following:
   (1) That the changes required by the qualifying provisions in the
allocations of ad valorem property tax revenues do not have a net
fiscal impact upon school districts, as defined in accordance with
Section 41302.5, or community college districts.
   (2) That the changes required by the qualifying provisions in the
allocations of ad valorem property tax revenues do not have a net
fiscal impact upon the amounts of revenue otherwise required to be
applied by the state for the support of school districts and
community college districts pursuant to Section 8 of Article XVI of
the California Constitution.
  SEC. 2.  Section 63025.2 is added to the Government Code, to read:

   63025.2.  Nothing in Section 63025.1 shall be construed to extend
or limit the authority of the bank that is otherwise provided in
Section 19130.
  SEC. 3.  Section 63035.5 is added to the Government Code, to read:

   63035.5.  The report required by Section 63035 shall be submitted
to the Governor and the Joint Legislative Budget Committee on a
quarterly basis during the 1999-2000 fiscal year and the 2000-01
fiscal year.
  SEC. 4.  Section 63041 of the Government Code is amended to read:
   63041.  (a) Prior to submitting a project to the bank for
consideration, the legislative body or bodies of the sponsor or
sponsors of the project shall find, by resolution, each of the
following:
   (1) The project is consistent with the general plan of both the
city and county, or city and county in the case of San Francisco, or
only the county for projects in unincorporated areas in which the
project is located.
   (2) The proposed financing is appropriate for the specific
project.
   (3) The project facilitates effective and efficient use of
existing and future public resources so as to promote both economic
development and conservation of natural resources.  The project
develops and enhances public infrastructure in a manner that will
attract, create, and sustain long-term employment opportunities.
   (4) The project is consistent with the criteria, priorities, and
guidelines for the selection of projects adopted pursuant to Section
63040.
   (b) Upon the adoption of the resolution in subdivision (a) by the
legislative body, the legislative body shall transmit the resolution
to the executive director of the infrastructure bank.
  SEC. 5.  Section 63041.5 is added to the Government Code, to read:

   63041.5.  (a) It is the intent of the Legislature to provide a
one-time appropriation for financial assistance to local government
to meet capital outlay and infrastructure needs.
   (b) From the funds appropriated in Item 2920-111-0001 of the
Budget Act of 1999, the sum of four hundred twenty-five million
dollars ($425,000,000) shall be available for financial assistance,
including, but not limited to, leveraged revolving fund loans, to
local government sponsors for public development facilities, as
specified in subdivision (q) of Section 63010 of the Government Code.

   (c) From the funds appropriated in Item 2920-111-0001 of the
Budget Act of 1999 and in Item 2920-111-0001 of the Budget Act of
1998 (Chapter 324 of the Statutes of 1998), the California
Infrastructure and Economic Development Bank shall make no single
loan in excess of 10 percent of the combined amount of these
appropriations to the bank unless approved by unanimous consent of
the membership of the Board of Directors of the California
Infrastructure and Economic Development Bank and the Director of
Finance provides a 30-day written notice to the Chairperson and
Vice-Chairperson of the Joint Legislative Budget Committee.
  SEC. 6.  Section 97.43 is added to the Revenue and Taxation Code,
to read:
   97.43.  (a) Notwithstanding any other provision of this article,
for purposes of ad valorem property tax revenue allocations for the
2000-01 fiscal year and each fiscal year thereafter, the total amount
of ad valorem property tax revenue allocated to the county's
Educational Revenue Augmentation Fund shall not exceed the total
amount of revenues allocated to that fund for the 1999-2000 fiscal
year.
   (b) In the 2000-01 fiscal year and each fiscal year thereafter,
any amount of ad valorem property tax revenue that is not allocated
to a county's Educational Revenue Augmentation Fund as a result of
the limit established by subdivision (a) shall instead be allocated
among the local agencies in the county in accordance with each local
agency's proportionate share of the total amount of ad valorem
property tax revenues that would be required to be allocated to the
county's Educational Revenue Augmentation Fund in the absence of this
section.
  SEC. 7.  For purposes of allocating one-half of the moneys
appropriated by Item 9210-118-0001 of the Budget Act of 1999, all of
the following apply:
   (a) A county is prohibited from receiving any portion of the
moneys unless the county complies with all of the following:
   (1) No later than October 1, 1999, the county auditor reports to
the Controller and the Director of Finance the total amount of ad
valorem property tax revenue allocated from the county's Educational
Revenue Augmentation Fund to school districts, community college
districts, and county superintendents of schools for the 1998-99
fiscal year.
   (2) The county board of supervisors adopts an ordinance or
resolution that specifies each amount of ad valorem property tax
revenue shifted from a local agency within the county to the county's
Educational Revenue Augmentation Fund for the 1998-99 fiscal year,
and the chairperson of the county board of supervisors reports those
revenue shift amounts to the Controller and the Director of Finance
in a manner that identifies the revenue shift amount for each local
agency in the county.
   (3) The county board of supervisors adopts an ordinance or
resolution pursuant to which the county agrees to both of the
following:
   (A) The county will allocate its share of the appropriated moneys
subject to this section in accordance with subdivision (d).
   (B) The county will not, in connection with either paragraphs (1)
or (2) of this subdivision or subdivision (d), make any claim for
reimbursement of state-mandated local costs.
   No later than December 1, 1999, the county board of supervisors
shall transmit the ordinance or resolution adopted pursuant to this
paragraph to the Director of Finance.  The Controller shall
promulgate guidelines for the making of reports as required by this
subdivision.
   (b) For each county that complies with all of the conditions set
forth in subdivision (a), the Controller shall do both of the
following:
   (1) Perform the following calculations:
   (A) Divide the amount reported by the county auditor in accordance
with paragraph (1) of subdivision (a) by the total of all of the
amounts reported by counties in accordance with paragraph (1) of
subdivision (a).
   (B) Divide the amount appropriated by Item 9210-118-0001 of the
Budget Act of 1999 by two.
   (C) Multiply the amount determined in accordance with subparagraph
(A) by the amount determined in accordance with subparagraph (B).
   For purposes of performing these calculations, the Controller
shall review the information submitted by the county.  If, consistent
with information available from any other reliable source, the
Controller determines that the information may be inaccurate, the
Controller may request the Director of Finance to review the amount
reported by the county in accordance with paragraph (1) of
subdivision (a).  The Director of Finance may direct the Controller
to adjust the amount reported to the Controller by the county in
accordance with paragraph (1) of subdivision (a).  The Controller
shall inform the county of any adjustment that is so made.
   (2) No later than February 1, 2000, the Controller shall, from the
appropriated revenues subject to this section, allocate to the
county the amount determined for that county pursuant to paragraph
(1).
   (c) In each county that receives revenue in accordance with
subdivision (b), the county auditor shall allocate that revenue to
those local agencies among the county, and cities and special
districts in the county, that contributed a positive amount to the
county's Educational Revenue Augmentation Fund for the 1998-99 fiscal
year.  The allocation share for each recipient local agency shall be
determined pursuant to the following calculations:
   (1) Divide the amount of revenue shifted for the 1998-99 fiscal
year from the local agency to the county's Educational Revenue
Augmentation Fund by the total amount of revenue shifted for the
1998-99 fiscal year to the county's Educational Revenue Augmentation
Fund by all local agencies in the county contributing a positive
amount to that fund.
   (2) Multiply the ratio determined pursuant to paragraph (1) by the
amount of revenues allocated to the county pursuant to paragraph (2)
of subdivision (b).
  SEC. 8.  For purposes of allocating one-half of the moneys
appropriated by Item 9210-118-0001 of the 1999 Budget Act, all of the
following apply:
   (a) The Department of Finance shall, no later than August 1, 1999,
provide to the Controller its estimate, as of January 1, 1999, of
the population of each city in the state and the unincorporated area
of each county in the state.
   (b) The Controller shall, no later than October 1, 1999, allocate
the appropriated moneys subject to this section among the cities and
counties in the state in accordance with each city and each county's
proportionate share of the combined total of the population estimates
provided by the Department of Finance in accordance with subdivision
(a).
   (c) The City and County of San Francisco is deemed to be a city.
  SEC. 9.  For the 2000-01 fiscal year and each fiscal year
thereafter, the Legislature shall provide an annual subvention
consistent with both of the following:
   (a) For each fiscal year, a county is not eligible to receive a
subvention allocation unless the auditor of that county, no later
than October 1 in that fiscal year, reports to the Department of
Finance the property tax administrative cost shares, determined for
the immediately preceding fiscal year in accordance with Section 95.3
of the Revenue and Taxation Code, for school entities as defined in
subdivision (f) of Section 95 of the Revenue and Taxation Code.  The
Department of Finance may, consistent with information available from
the Controller or any other reliable source, including information
with respect to county fiscal relief pursuant to Section 95.31 of the
Revenue and Taxation Code, adjust the amount of any administrative
cost share that is so reported by a county auditor.  The department
shall notify the relevant auditor of any adjustment that is so made.
The department shall, no later than January 1 in the fiscal year,
notify the Controller of the total amount for each county of the
administrative cost shares reported and, if applicable, adjusted in
accordance with this subdivision.
   (b) No later than February 1 in the fiscal year, the Controller
shall, from the General Fund, allocate to each county an amount equal
to the total amount determined for that county in accordance with
subdivision (a).
  SEC. 10.  The Legislature hereby finds and declares both of the
following:
   (a) None of the fiscal relief provided by this act should be
construed to determine or otherwise affect any legal issue raised by
an action in which a county, city, or special district, or any
representative thereof, alleges that a state-mandated local program
includes any state law requirement to shift ad valorem property tax
revenues from local agencies in a county to an Educational Revenue
Augmentation Fund.
   (b) The Legislature does not intend that this act exemplify or
limit the nature of any future act that affects state or local
government finance.
  SEC. 11.  (a) Sections 1, 6, and 9 of this act shall not become
operative unless an amendment to the California Constitution is
placed on the ballot by the Legislature and is approved by the
statewide electorate during the 2000 calendar year, to do both of the
following:
   (1) Specifically reference Sections 1, 6, and 9 of this act and
state that those provisions shall not become operative unless the
amendment is approved by the statewide electorate during the 2000
calendar year.
   (2) Make a substantive legal change with respect to any, or any
combination, of the following:
   (A) The taxing powers of one or more classes of local governments.

   (B) The manner in which state government revenues are subvened or
otherwise allocated to local governments.
   (C) The allocation in each county of ad valorem property tax
revenues, local sales tax revenues, or any other local tax revenues.

  SEC. 12.  No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution because
this act provides for offsetting savings to local agencies or school
districts that result in no net costs to the local agencies or school
districts, within the meaning of Section 17556 of the Government
Code.
  SEC. 13.  This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect.  The facts constituting the necessity are:
   In order to provide in a timely manner that measure of fiscal
relief that will allow local governments to begin to address
longstanding needs with respect to essential public services and
public facilities, it is necessary that this act take effect
immediately.
